CYPRUS MAIL

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Cyprus Mail www.cyprus-mail.com

Saturday, December 22, 2012

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CYPRUS

SPORT

LIFESTYLE

Police warn about burglars, beggars and pickpockets 3

Reinvigorated Arsenal kick-off festive feast

The on the run Russian oligarch who conquered London’s wine industry

Tomorrow in

32

centre

Mixed messages on debt haircut ECB: Cyprus debt

unsustainable FREE with your Germany not ruling Sunday Mail out haircut Culture Christofias: ‘no way’ One man’s obsession IMF stays mum with natural history Putin offers support turns into a museum People

By Stefanos Evripidou

D

A life ranging from formula driving to New Age therapies

Fashion Men: dare you wear fashion’s latest look, the not so butch meggings??

Showbiz Lunch with 007 favourite Roger Moore

Competition Win a night for two at the St Raphael resort

ESPITE GOVERNMENT efforts to quash concerns of a Cyprus debt haircut, yesterday’s mixed messages coming from international players who now hold the fate of the island’s economy in their hands made any predictions on Cyprus’ future as valuable as a Chinese fortune cookie. Yesterday’s comments on a potential haircut from representatives of the European Central Bank (ECB), International Monetary Fund (IMF), Eurogroup, Germany and Russia would have left most analysts scratching their heads as to what exactly is the troika’s plan for Cyprus. The confusion over the likelihood of a possible haircut of Cyprus’ debt - which could prove disastrous for the country - revealed the complex web of interests and concerns involved in rescuing the third smallest economy in the EU, with multifaceted variables pulling the involved parties in opposing directions. President Demetris Christofias yesterday ruled out the possibility of a haircut on the Cyprus debt. Asked to comment on reports that the IMF is considering a Cyprus debt write-off to make the island’s debt more sustainable post-bailout, Christofias said a haircut would require the consent of all

27 EU member states. “We will not accept such a thing,” he said in no uncertain terms. However, reports have been circulating in recent days that the IMF will only agree to contribute to Cyprus’ estimated €17.5 billion bailout if the country’s public debt is deemed sustainable. Germany, meanwhile, has made its participation in the Cyprus rescue contingent on the IMF’s involvement. The IMF reportedly fears Cyprus is about to take on such a massive loan - 100 per cent of its GDP - that it will drown under the weight of paying the interest alone. An ECB representative yesterday made it clear that the country’s debt is not sustainable. Similar considerations were made when the international lenders had to loan money to Greece, leading to an 80 per cent writedown on Greek bonds. As a result, Cypriot banks - highly exposed to Greek debt - took a massive hit, bumping up their recapitalisation needs and leading Cyprus to request EU/IMF financial support. At the time, EU partners signalled that the losses incurred by private holders of Greek debt was a one-off that would not be repeated in other members of the eurozone. According to Finance Minister Vassos Shiarly, the IMF is also putting

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An activist of Ukraine’s feminist movement Femen is taken away by Belgian police from in front of the EU Council building in Brussels as she demonstrates against the visit there by Russian President Vladimir Putin who was attending the EU-Russia summit yesterday (AFP)


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